Property developers in Spain confirm drop in sale of homes

The president of the Association of Spanish Constructors and Promoters (APCE), Guillermo Chicote, yesterday confirmed that the sale of flats went down by up to 60% between September and April and that there is now a surplus of around 500,000 unsold properties. Gerardo Díaz Ferrán, from the CEOE also warned that if the government did not adopt ‘brave and aggressive’ measures to alleviate the economic slowdown in Spain there would be half a million more unemployed by the end of the year. According to Chicote, the situation will get worse in 2009 and that instead of 300,000 unemployed workers in the construction sector this number would rise to 500,000.

The APCE announced that if more properties were not sold then the ‘Treasury would not have money coming in and that it would have to pay out more money in subsidies to the unemployed’. Chicote also suggested some ways of increasing the demand for housing by creating a new category that fell between subsidised state housing and private housing with a fixed price.

Promoters have also asked the government to take a number of financial steps within the space of 3 years one of which would be to update the tax rebate for buying a property set in 1998 at 9,015 euros.

With respect to prices, APCE predicts that prices will continue to increase slightly below the rate of inflation. According to the latest official figures published by the Housing Ministry the price of flats went up only by 4% in this last quarter compared to an inflation rate of 4.5%.